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Buy-to-let beats gold cash and fine art for investment returns in the last decade

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Research by VeriSmart, the UK’s only combined lettings inventory and property compliance specialists, has looked at just how lucrative the UK buy-to-let market has been in the 10-years since the financial crisis when compared to other investment options like the FTSE 100, classic cars, gold and fine art.

VeriSmart looked at the return on each investment and how each market has performed over the last 10-years with the research showing that buy-to-let property is up there with the FTSE 100 and classic cars when it comes to a sound investment.

Investing in the FTSE 100 would have brought the biggest return when considering the annual capital gain and the percentage yield with an increase of 119%, whilst the value of classic cars is up 94% during the same time period.

However, for those that aren’t professional investors or that don’t have the garage space for a fleet of classic cars, a buy-to-let property is a very good ‘next best option’ and, when considering the annual gain in house prices along with the increase in rental yields, an investment in the sector a decade ago would have brought a 92% return today.

This is much higher than the 60% return that investing in gold would have brought and a world away from the 16% increase in cash or the -4% drop in fine art.

It’s also important to note that the growth in the property market has been by far the most reliable option with the FTSE 100, gold or cash providing a far more volatile option that is also open to a larger degree of impact from political and economic factors as well as influence from other foreign countries.

While classic car investment sits ahead of property, that too is made or broken on the car itself rather than the overall market and while a nice art collection may brighten your walls, it is also harder to find a buyer for, even when compared to the current Brexit property market slowdown.

All things considered and despite successive Chancellors hitting the buy-to-let sector with numerous legislative penalties including an increase in stamp duty, a reduction in high rate tax relief for landlords and a higher rate of capital gains tax on residential property profits, UK bricks and mortar remains one of the best and most stable investments available.

Founder of VeriSmart, Jonathan Senior said, “Last week’s spring statement was a missed opportunity for the Government to backtrack on their previous attacks on the buy-to-let sector, attacks that have done little to solve the UK housing crisis and if anything, have caused further restrictions in the level of suitable stock while keeping rental prices buoyant as a result.

“However, the buy-to-let sector remains the backbone of the UK property market, helping to support aspirational homeowners as they work to overcome the sometimes impossible financial barriers of homeownership. The need for this support is clearly evident as it remains one of the most lucrative investments one can make.

“With little being done to address property supply or affordability on a meaningful scale, this is likely to continue going forward and despite the Government’s best efforts there will always be demand for a good, honest landlord providing above the board accommodation to those that need it.”

Year 10 Year Gain  
FTSE 100 119%
Classic Cars 94%
Buy-to-Let 92%
Gold 60%
Cash 16%
Art -4%
FTSE 100
Year FTSE 100 Index Annual Capital Gain % Yield (Dividend) % Total FTSE 100 Gain
2009 4147
2010 5302 27.85 3.01 31
2011 5881 10.92 3.62 15
2012 5733 -2.52 3.72 1
2013 6089 6.21 3.46 10
2014 6739 10.67 3.54 14
2015 6501 -3.53 3.98 0
2016 5804 -10.72 3.65 -7
2017 7337 26.41 3.81 30
2018 7730 5.36 4.01 9
Total 10 Year Gain 86.4 32.8 119
Source: FTSE 100 Index
 
Classic Cars  
Year Classic Cars % Total Classic Car Gain
2009 £1,003,733
2010 £1,061,562 6
2011 £1,139,465 7
2012 £1,233,351 8
2013 £1,465,975 19
2014 £1,746,184 19
2015 £1,907,475 9
2016 £1,960,490 3
2017 £1,938,526 -1
2018 £1,945,429 0
Total 10 Year Gain 94  
Source: K500 Index  
Buy-to-Let
Year Property value Annual Capital Gain % Yield (Rental) Gross % Total Property Gain
2009 £157,234 5.06 5
2010 £167,469 6.51 4.84 11
2011 £167,300 -0.1 4.97 5
2012 £165,908 -0.83 5.14 4
2013 £167,716 1.09 5.05 6
2014 £178,182 6.24 5.14 11
2015 £190,665 7.01 4.88 12
2016 £205,462 7.76 4.66 12
2017 £215,084 4.68 4.64 9
2018 £224,425 4.34 4.47 9
Total 10 Year Gain 42.73 48.86 92
Source: Land Registry
 
Gold  
Year Gold per oz % Total Gold Gain  
2009 £602.00
2010 £693.00 15
2011 £859.00 24
2012 £1,045.00 22
2013 £1,052.00 1
2014 £759.00 -28
2015 £823.00 8
2016 £763.00 -7
2017 £985.00 29
2018 £962.00 -2
Total 10 Year Gain 60  
Source: Gold.co.uk  
Cash  
Year % Gross Annual Yield on Cash*  
2009
2010 3
2011 3
2012 3
2013 2
2014 1
2015 1
2016 1
2017 1
2018 1
Total 10 Year Gain 16  
Art  
Year Art Index % Total Art Gain  
2009 160
2010 181 13
2011 208 15
2012 193 -7
2013 194 1
2014 196 1
2015 201 3
2016 153 -24
2017 152 -1
2018 154 1
Total 10 Year Gain -4  
Source: ArtPrice  



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